Is competition in business a good thing?
‘You need to find a gap in the market!’ is a suggestion often touted by business coaches and mentors across the land. Whilst this can certainly be a positive, there’s nothing wrong with starting a business in a saturated market…
Diane Hall
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Is competition in business a good thing?
‘You need to find a gap in the market!’ is a suggestion often touted by business coaches and mentors across the land. Whilst this can certainly be a positive, there’s nothing wrong with starting a business in a saturated market…
You just need to bigger, better, faster or cheaper
There’s no point simply replicating what your competitors do/charge. To have any chance in a saturated market you need to have your own USP. You may provide exactly the same thing as your rival(s), but there needs to be good reason for the general public to switch their allegiance and spend their money with you.
Maybe you offer a better, more personal shopping experience. Maybe you’re that little bit cheaper whilst offering the same quality. Maybe where you’re situated is more convenient for your target market. Maybe you offer quicker delivery…just determine what makes you better than your competitors and make sure everyone knows about it.
Much less risk than trading in an untested market
If you plan on providing something that a competitor already provides (and they look to be doing pretty well out of it), there’s likely room for you too (see above). What this also tells you is that there is demand for the product/service you are about to sell (proven by your competitor’s success).
If you see a gap in the market, there could be a reason why it’s there—it could be that people have already tried to fill this gap and failed, through one reason or another. If you’re following in the footsteps of a successful business or two, but adding your own unique elements, you won’t have to worry whether the general public will like what you offer. You just have to work on winning business from your rivals.
No gap in understanding
On a similar note, when it comes to your marketing, you won’t have to explain what your product or service is, if it’s one that’s readily available. Innovative goods and new inventions can be very successful, but you’ve to first create your audience and explain to them the benefits of what it is you’re bringing to market. You risk the public thinking, ‘Well, we’ve managed for long enough without this brand-new product/service, surely that proves we don’t need it?’—this can be a big hurdle to overcome with anything new, which is bound to encounter some initial resistance. If you enter a proven market, you won’t have as many objections from potential buyers to overcome.
Fantastic footfall
You don’t find McDonald’s worried if a Burger King sets up shop next door. They know that, together, they will bring more people to the area than one outlet alone. Then they only have to practise the elements of point one (above) and they’ve potentially got a much larger customer base.
However, there is a caveat to this: think of a row of barbers on the same street—if you have a finite pool of customers, you will undoubtedly end up sharing clients. And the more there are of you in close proximity who provide the same thing, the smaller that customer pool will become for each of you.
McDonald’s and Burger King don’t solely rely on local customers. They’re often on prominent roads and junctions—this is why the ‘too many barbers’ example doesn’t apply to them.
Piggyback marketing
In business, particularly if you have physical premises, your marketing has to encourage people to get off their sofas and make the journey to your door, when they could just click a few buttons on their phone to receive the exact same thing—a task that gets harder as the years roll by and technology continues to advance.
If you have a competitor nearby, he/she will already be doing all the hard work. You, therefore, don’t have to work to get people to act, you just have to work on getting them from your competitor’s door to yours. The customer journey is a long one, and there are a lot of touch points to get an unsuspecting individual to be a would-be customer eager to part with their money. Once they’ve made their decision that what you and your rival offer is the item/service they want to buy, and they have worked out how they can afford this and when they can come to purchase, the very last part—concerning who exactly they will buy from—is all that stands between you and the sale.
Let your competitor do the donkey work and just concentrate on swooping in at the last minute. Just prove, in your marketing efforts, that you’re bigger, better, faster or cheaper than the guy down the road…
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